This calculator works out exactly what lands in your bank account from a UK salary in 2026/27, after income tax, employee National Insurance, pension contributions and student loan deductions. It uses live HMRC rates for the personal allowance (£12,570), the basic and higher-rate income tax bands, the 8% and 2% employee NI rates, the four student loan plan thresholds and both relief-at-source and salary sacrifice pension structures. Enter your gross salary and the calculator produces your monthly and annual take-home alongside the breakdown.
What gets deducted from your gross salary
There are four main lines:
- Income tax at 20%, 40% or 45% depending on which bands your salary falls in, after the £12,570 personal allowance. Scottish bands apply if your main home is in Scotland.
- Employee National Insurance at 8% on earnings between £12,570 and £50,270 and at 2% on earnings above £50,270.
- Student loan repayments at 9% (Plans 1, 2, 4) or 6% (Plan 5 / Postgraduate Loan) above each plan’s earnings threshold. Plan 1 threshold for 2026/27 is approximately £25,000, Plan 2 around £28,000, Plan 4 (Scotland) around £32,000, Plan 5 around £25,000, and Postgraduate Loan around £21,000.
- Pension contribution, taken either before tax (salary sacrifice or net pay arrangement) or after tax (relief at source).
Pension structure matters more than people realise. A salary sacrifice contribution reduces your gross salary before income tax and employee NI are calculated, so a £100 contribution costs about £68 of take-home for a basic-rate taxpayer and about £58 for a higher-rate taxpayer. A relief-at-source contribution comes out of your already-taxed pay, with the pension provider claiming 20% basic-rate relief; a higher-rate or additional-rate taxpayer must claim further relief through Self Assessment.
Worked example: £45,000 salary, basic-rate, no student loan, 5% pension
A £45,000 salary in England with a 5% relief-at-source pension contribution and no student loan:
- Gross: £45,000
- Income tax: (£45,000 − £12,570) Ã, 20% = £6,486
- Employee NI: (£45,000 − £12,570) Ã, 8% = £2,594
- Pension (5% relief at source, so taken from net): £2,250
- Take-home: £45,000 − £6,486 − £2,594 − £2,250 = £33,670 per year, or about £2,806 per month
The pension provider then adds £562.50 of basic-rate relief to the £2,250 contribution, so £2,812.50 lands in the pension pot.
The same person on a salary sacrifice pension would have a different take-home: £45,000 sacrificing £2,250 means PAYE is calculated on £42,750. Income tax: (£42,750 − £12,570) Ã, 20% = £6,036. NI: (£42,750 − £12,570) Ã, 8% = £2,414. Take-home: £42,750 − £6,036 − £2,414 = £34,300 per year, with the full £2,250 in the pension. Salary sacrifice has put roughly £630 more in the pocket and the same amount in the pension.
Tax codes and how they affect your take-home
A tax code translates HMRC’s view of your personal tax position into a number your employer’s payroll uses. 1257L means full personal allowance, no adjustments. 1257L W1/M1 means a non-cumulative emergency code that taxes each pay period in isolation, often used when you start a new job mid-year. K codes mean HMRC has decided your deductions (company benefits, untaxed prior-year income) exceed your allowance and is collecting extra tax through PAYE. BR (basic rate) and D0 (40%) and D1 (45%) codes are used for second jobs where the personal allowance is already used at the first job.
This calculator uses 1257L by default but accepts any tax code; the code drives a small fixed adjustment to the assumed personal allowance.
Bonuses, pay rises and the threshold cliffs
A pay rise that pushes you across a threshold doesn’t increase the tax on your old earnings — only on the new pound. So a £5,000 pay rise that takes you from £49,000 to £54,000 doesn’t tax all £54,000 at 40%. The first £49,000 stays in the same bands; only the portion that crosses £50,270 attracts the higher rate. For the £5,000 rise: £1,270 stays at 20% basic-rate (plus 8% NI), and £3,730 crosses into 40% (plus 2% NI). Net of tax and NI, you keep approximately £2,800 of the £5,000.
A bonus paid in a single month often looks heavily taxed because PAYE annualises it. A £5,000 bonus paid in March on a £45,000 base looks like £45,000 + (12 Ã, £5,000) = £105,000 to the system in that month, so the tax deducted reflects higher-rate withholding. The annual reconciliation through the cumulative code corrects this within a month or two.
Key takeaways
- Take-home depends on income tax (20%, 40%, 45%), employee NI (8%, 2%), student loan and pension, in that order of typical size.
- Salary sacrifice pension contributions reduce both income tax and NI; relief-at-source contributions only reduce income tax via the eventual claim.
- A £45,000 salary in England produces about £33,670 of take-home with a 5% relief-at-source pension and no student loan.
- The £100,000 to £125,140 band has a 60% effective income tax rate due to personal allowance taper; this calculator flags it.
- Scottish residents pay different income tax bands but the same employee NI as the rest of the UK.
Frequently asked questions
What’s the difference between gross and net pay? Gross pay is your salary before any deductions. Net pay (take-home) is what lands in your bank account after income tax, employee NI, pension contributions, student loan and any other deductions like buy-to-let-mortgage-relief share schemes or healthcare.
Why does my take-home seem lower than the calculator suggests? The most common reasons are: a different tax code than 1257L (often because of company benefits or a prior-year underpayment), a pension contribution structured as relief-at-source rather than salary sacrifice (so the pension reduction comes out of net pay), or a student loan plan you forgot to include.
Does the calculator handle Scottish income tax? Yes. Tick the Scotland option and the calculator switches to the six Scottish income tax bands (19%, 20%, 21%, 42%, 45%, 48%). NI is the same UK-wide.
Do I pay NI on my pension contributions? On salary sacrifice contributions, no — the contribution comes off before NI is calculated. On relief-at-source and net-pay contributions, NI is paid on the full salary first, then the contribution comes out of the already-NI’d pay. This is why salary sacrifice is more tax-efficient than the alternatives for most pension savers.